Diminished Mental Capacity: Protecting Seniors from Financial Exploitation

    Diminished Mental Capacity: Protecting Seniors from Financial Exploitation

    By Alethea O’Donnell

    Forgetfulness or diminished mental capacity: One can be troublesome; the other, financially dangerous.

    In the most troubling situations, an elderly person with diminished mental capacity could be victimized by financial exploitation, and risk losing their entire life savings. However, financial problems may result even when there isn’t an exploitive situation. For instance forgetting to cash a check for life insurance proceeds could deprive an elderly person of finances for ongoing living expenses. An elderly person who forgets to pay their mortgage could risk losing their home. A senior who fails to pay heating or cooling bills could risk their health and safety.

    Memory issues are common with aging: Ten to 15 percent of adults older than 65 have mild cognitive impairment.

    However, roughly half of these individuals are eventually diagnosed with Alzheimer’s disease or dementia within five years. Warning signs of Alzheimer’s can begin as early as 15 years before the diagnosis. 

    Warning Signs of Diminished Mental Capacity

    Is there anything you can to do to spot diminished mental capacity in someone you love? Here are some common signs:

    • The elderly person is unable to hold a prolonged conversation
    • The individual seems confused or disoriented
    • He or she seems depressed or unusually subdued
    • The elderly person cannot keep up with current events, or becomes confused about the day of the week or the date
    • When asked about financial information, the individual shows memory lapses
    • The elderly person does not remember certain routine financial information, or does not remember having conducted financial transactions

    As a family member or close friend of an elderly person, you may be in the best position to detect early signs of diminished mental capacity.

    What To Do If You See Signs of Diminished Mental Capacity?

    An elderly person with diminished mental capacity is at greater risk of exploitation. There are steps you can take to prevent an elderly loved one from suffering from financial harm. 

    The first step you can take is to talk with the elderly individual about whether you can help. Perhaps they will allow you to monitor their financial accounts. Or, they may accept your assistance with balancing their checkbook or paying bills. Other assistance you can offer includes:

    • Ask your loved one if he/she would be willing to meet with you and their financial professional. A trusted financial professional may be able to work with the senior client to help protect their assets.
    • Determine if the senior would be willing to talk with an attorney who specializes in elder legal services. An attorney can review a variety of legal tools to protect the elderly individual, such as a trust, power of attorney, medical directive or a guardianship or conservatorship. The attorney can work with the elderly person and their family to determine the best approach.
    • If the elderly person has questions about specific accounts, encourage them to contact their financial institution. (MassMutual has resources to help clients with these difficult situations. Contact ElderAbuse@massmutual.com with questions).

    Diminished mental capacity affects millions of Americans. As a close family member or friend, you may be in the best position to spot signs of diminished capacity and protect the ones you love.